BAE withdraws from $500m project tender

DEFENCE company BAE Systems Australia has sacked two employees for acting improperly and withdrawn from tendering for a major defence project

AAPDecember 20, 20124:30pm

AUSTRALIA'S largest defence company BAE Systems Australia has withdrawn from tendering for the next phase of a $500 million defence communications project, sacking two employees for improper conduct.

BAE Systems Australia chief executive David Allott said these decisions had not been made lightly and reflected the company's zero tolerance for ethical breaches.

It's understood the two employees acted unethically in seeking to obtain information to give the company a commercial advantage in tendering for the project.

BAE Systems Australia, based in Edinburgh, South Australia, has a turnover of $1.8 billion, 6000 employees in Australia and is involved in a large number of procurement projects for the Australian Defence Force.

One is what's termed Joint Project 2072 (JP 2072) to provide a modern and integrated communications system for ADF land-based elements.

The current Phase 2B of JP 2072 aims to supply an advanced communications infrastructure for deployed headquarters using commercially available equipment. This will replace the older Parakeet communications system supplied by BAE in the 1990s.

The current Defence Capability Plan puts the acquisition cost at the lower end of the $500,000 to $1 million band with a decision on the winning tender in next 18 months.

Four companies were tendering for this project.

In a statement released on Thursday, BAE said it made the decision to withdraw after discovering a breach of Defence's tender protocols had occurred during its participation in the initial tender process.

Following an investigation, two BAE employees had been dismissed in line with BAE Systems' Code of Conduct.

Mr Allott said the company felt it had developed a strong, locally-based solution for army battlespace communications.

"However, how we behave is just as important as how we operate and we are determined to act responsibly whenever and wherever any inappropriate behaviour is detected," he said.

Mr Allott said the company submitted hundreds of tenders to Defence each year and this was the first time it had identified a breach of this nature.

"We view this breach extremely seriously. We have commenced a review of our business proposal development processes to ensure that it does not occur again," he said.